A tale of Norse Energy and their business practices. For them to now imply that it was New York State that somehow caused their bankruptcy is just another advertising (IOGA- BS) statement.
From the Supervisor, Town of Lebanon, Madison County, New York:
“Dear Lebanon residents and interested others:
This is yet another view of why Norse Energy Inc went bankrupt sent to me by a local resident who once had a gas lease. Those of us who dealt with Norse could have predicted this result and the excuse of blaming their demise on the failure of NYS to advance regulations on High Volume Hydraulic Fracturing is laughable.
According to Professor of Geology and local resident Bruce Selleck of Colgate University, whom the anti-drilling groups are convinced is a “shill” for the oil and gas industry (not my experience, Bruce has always been consistent in the 12 years I have known him on this issue and also served as a planning board member and member of our windmill regulations committee with distinction), the promise of HVHF and shale gas in upstate New York is overstated and particularly in areas where Norse had leases and wells. Professor Selleck has also given many presentations to our town board and other groups in Madison County where he has consistently noted that the economics of gas drilling clearly show Norse did not have a good business model and did not make good business decisions. Here in Lebanon, we saw several times they drilled a dud well next to a dud well or my favorite example, they drilled the Mulligan well without any rights of way to attach it to their gathering system and never drew gas out of that well, according to Norse officials, and Emkey Resources, their successor, just spent money to cap it.
Long story short, before you sign or negotiate a lease, not only should you see a qualified attorney who is an expert on gas leasing, but you should find out everything you can about the company and its business practices and the experience of past landowners. In Lebanon, in just one year, I had more complaints about Norse Energy in 2007 during their seismic and increased drilling phase than I have had on all other issues in the township combined, and the Attorney General’s office was frequently contacted about allegations ranging from forged documents to illegal spacing units to trespassing to property impacts to gas royalty payments. We also need to remember Norse’s effort to try and force residents who had lease agreements on wells that allowed the use of some gas for home and farm to try and force those residences off that gas illegally, not to mention massive delays—over two years in some cases – for some landowners in getting paid for royalties due to delays in spacing unit approvals that the DEC clearly stated was due to Norse submitting faulty exhibits.
Of course, during the increased leasing phase, I received complaints of land agents using the false threat of eminent domain, visiting older residents late in the evening, using intimidation tactics and outright threats or lies, and, of course, pressuring lease signings and confidentiality agreements without legal counsel. This describes just the tip of the iceberg and does not even begin to review the numerous large public meetings with former Norse officials in which many half-truths and lies were publicly stated that just never held up. Neighbors were encouraged not to talk to neighbors and the Norse message was clearly divide and conquer, not work with a community contrary to their regular rhetoric and proganda
It is no surprise that these tactics gave rise to the landowner coalition movements spearheaded by the Farm Bureau statewide.
I recall a very brief disagreement I had with Hydrology Professor Don Siegel of Syracuse, a big advocate of HVHF and drilling for gas in this state. I pointed out that regardless of the technology, the science (which I think is still in some debate and discussion), the public health and environmental impacts, and the business model, he had to remember that very flawed, often greedy and untrustworthy human beings were involved in implementing this process, not ethical upstanding local businessmen and certainly not well programmed robots. Well, I recall that he just did not want to have that conversation because it clarifies the debate—that it is human beings, not ideas or concepts, that ultimately implement and are responsible for regulating these high impact high industrial processes. I simply shared that here in Lebanon, on the ground, we had first-hand experience with how the natural gas industry operates as well as the DEC and I found both remarkably deficient and inadequate in so many areas. Some in the industry have tried to paint Norse as an outlier, the “bad poster boy for the industry”, but then why did they make Mr. Holbrook a spokesman for the Independent Oil and Gas Producers Association (IOGA), another untrustworthy group I have had first hand dealings with. I do not think Norse is an outlier. I think they are a symptom of the problem.
It makes good common sense to put the brakes on any industry that conducts itself the way Norse has in our town so it is no surprise that this is the direction the informed residents of our county and state are trending. As people get more educated, they continue to conclude that there are massive holes in the regulation and oversight of the industry, and lots of problems not just in HVHF proposed regs but in existing regs of existing drilling procedures. The most glaring is the absolute absence of any attempt to require pre and post testing of water and land sources near drilling sites and gas wells as well as full disclosure of all chemicals and processes used to drill wells now.
Long story short, gas drilling is a complex process and a complex industry, and as we can all see below, the claims of economic benefit and a gas boom are greatly overstated and certainly was the experience here in Lebanon. Fortunately, because of our very dedicated highway superintendent Alex Hodge and our persistence as a town, we made sure they fixed our roads properly and did not let them leave town without having satisfied all their obligations which was made possible by rules established by our town board that we had authority at the time to establish under town law and town highway law. It also taught us the crucial value of the road use law we are about to embark on very soon.”
Jim Goldstein, Lebanon Supervisor
ed. note: the highlights are mine, also note that Don Seigel has appeared in many of IOGA’s ads promoting fracking in NYS and then travels around claiming to be a neutral “academic” on the subject. See: Frackademia for more info.